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Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 12)

1
If a business receives cash from a customer, which of the following statements is correct?
Answer
(C)
The cash account is debited.
2
Which is the most common account in financial accounting?
Answer
(C)
Cash
3
Which of the following increases Owner's Equity?
Answer
(C)
Revenue
4
The balance on the irrecoverable debt account is transferred to the debit side of the income statement at the end of the accounting year. This will ____.
Answer
(A)
reduce profit for the year or increase loss.
5
What is the difference between a credit note and a debit note?
Answer
(B)
A credit note decreases the amount owed, a debit note increases it.
6
Which items are included in a bank current account?
Answer
A
B
D
7
What would the debit and credit entries be to record the purchase of inventory on account?
Answer
(B)
Debit: Inventory, Credit: Accounts Payable
8
Which of the following increases with a credit entry?
Answer
B
C
9
What is the purpose of a sales journal?
Answer
(B)
Record all credit sales transactions
10
Where is a cash discount recorded in a 3-column cash book?
Answer
A
D
11
Which of the following are errors that a trial balance will not detect?
Answer
B
C
D
12
What resources does a business require?
Answer
(B)
Inventory
13
What information should be included in the narrative section of a general journal entry?
Answer
(C)
c) A brief explanation of the transaction
14
Which of the following items would typically be recorded in the debit column of the cash book?
Answer
(C)
Cash sales
15
What kind of discount reduces the final price of a good?
Answer
(B)
Trade discount.
16
What is the correct order of the accounting cycle?
Answer
(A)
Transactions, Journal, Ledger, Trial Balance, Financial Statements
17
What is the main reason for providing a provision for doubtful debts?
Answer
(B)
To show a more realistic view of trade receivables.
18
Which of the following items are included on an invoice?
Answer
A
B
C
D
19
What does it mean, if the balance of bank account is a debit balance?
Answer
(A)
The business has funds in its account.
20
What kind of errors would a trial balance NOT detect?
Answer
A
C
D
21
Which document is used to support an entry in the Sales Returns Journal?
Answer
(A)
Credit Note
22
What is the impact of a provision for doubtful debts on profit?
Answer
(A)
It reduces the profit.
23
What happens to the balances of temporary accounts after closing entries are made?
Answer
(B)
b) They are closed to zero.
24
What is the purpose of balancing accounts?
Answer
(D)
All of the above
25
Which accounting principle is MOST directly related to the use of a general journal?
Answer
(C)
c) Double-entry bookkeeping
26
Which accounts will typically have a debit balance?
Answer
A
D
27
What does the sales journal provide a daily record of?
Answer
(A)
Credit sales
28
What is the impact of not recording an adjusting entry for accrued interest expense?
Answer
(C)
Liabilities are understated, and expenses are understated.
29
What is the main function of an invoice?
Answer
(B)
To request payment for goods/services.
30
What is a debit note?
Answer
(B)
A document issued by the supplier to the customer, for instance when goods are returned.
31
What details are usually included on a sales receipt?
Answer
A
B
C
D
32
Which of the following are the components of the accounting equation?
Answer
A
B
C
33
Which of the following items is debited in the journal?
Answer
(C)
Purchases
34
12. What is the result of paying wages?
Answer
(B)
Decreases cash.
35
A trial balance is used for preparing financial statements.
Answer
(A)
True
36
Other income earned by a business will require a double entry in an asset account. How can the business's income be recorded?
Answer
(D)
All of the above.
37
Which of the following accounts has a normal debit balance?
Answer
(C)
Cash
38
When recording a credit sale, where does the debit entry go?
Answer
(B)
Accounts Receivable Account
39
What is the purpose of a trial balance?
Answer
(A)
To check the equality of debits and credits
40
What do debit balances represent?
Answer
(D)
Increase in expenses
41
What is a debit balance?
Answer
(B)
When the debit side exceeds the credit side
42
The purpose of accrued income is to record _______
Answer
(A)
The income that has been earned but not yet received.
43
What is double entry book-keeping?
Answer
(A)
The recording of every transaction using two accounts
44
If a business purchases new equipment, what would be the correct entry in the general journal?
Answer
(B)
Debit Equipment, Credit Cash
45
Which of the following is an example of an error of original entry?
Answer
(C)
A transaction is recorded for the wrong amount in both the debit and credit sides.
46
Who typically issues a statement of account?
Answer
(B)
The supplier
47
What is the impact on the accounting equation when the company provides services to a customer on account?
Answer
(C)
Assets increase, owner's equity increases
48
2. Which of the following items would you debit to the general journal?
Answer
(D)
An irrecoverable debt for $500
49
Which of the following can be used to finance a business?
Answer
A
B
50
What is the role of a narrative in a general journal entry?
Answer
(B)
b) To explain the transaction.